TCRLA_Public/050726.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

            Tuesday, July 26, 2005, Vol. 6, Issue 146

                           Headlines

A R G E N T I N A

AGUAS ARGENTINAS: French Parent Likely to Exit Concession
ALPARGATAS: Fitch Reiterates Junk Status on 5 Bond Issues
BANCO HIPOTECARIO: Controller Delays Approval of BNL Acquisition
BANCO HIPOTECARIO: Regulator Summons Execs. to Aug. 22 Hearing
CLUB TRAFICO'S: Individual Reports to be Submitted by Trustee

CUEROS LITORAL: Gets Court Approval for Reorganization
EDEMSA: S&P Maintains Default Rating on Bonds
EMDERSA: Ashmore Seeks to Take Controlling Stake
ETINO: Verification Ends, Trustee to Submit Individual Reports
FABRICA DE HELADOS: Deadline for General Report Approaches

FARGO: Debt Restructuring Terms Are Harshest In History
GRANJA SAN PATRICIO: Court Grants Reorganization Plea
IMAGEN SATELITAL: Fitch Retains Default Ratings on ONs
HOSPEDAR S.A.: Validation of Claims Ends
JUAN SANTORO: Court Appoints Trustee for Reorganization

LO DE JORGE: Trustee to Present Individual Reports to Court
ORGANIZACION ARGENTINA: General Report Due on September


B R A Z I L

NET SERVICOS: Funds Acquire 115,336,300 Preferred Shares
UNIBANCO: Ups Tier 1 Perpetual Bond Issue on Strong Demand


C H I L E

SR TELECOM: Launches 8.15% Debentures Exchange Offer


J A M A I C A

DIGICEL LIMITED: Sells $300M, 7-Yr Senior Notes


M E X I C O

BALLY TOTAL: Largest Shareholder Wants CEO Replaced
EMPRESAS ICA: S&P Places 'B-' Rating On CreditWatch Positive
GRUPO IUSACELL: Sees 26.2% Increase in Net Revenues in 2Q05


V E N E Z U E L A

PDVSA: Former Exec Refutes Output Claims

     -  -  -  -  -  -  -  -

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A R G E N T I N A
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AGUAS ARGENTINAS: French Parent Likely to Exit Concession
---------------------------------------------------------
French utility company Suez SA is likely to exit its Buenos
Aires water concession this week if it doesn't get what it wants
from the South American country's government, says Dow Jones
Newswires.

Suez controls Aguas Argentinas, which operates Buenos Aires
waterworks under a 30-year contract. Suez is seeking a 20%
increase in government-regulated water rates in January and a
further 15% hike in the second half of 2006.

In addition, Suez would like to receive a helping hand from
Argentine state-owned Banco de la Nacion to convert part of
Aguas Argentinas' US$600 million debt into pesos to limit future
currency risks.

Earlier this month, Suez's local arm, Aguas Argentinas, said it
will use a board meeting on July 26 to determine "other courses
of action" if a new contract isn't reached by month-end.

"I'm pessimistic about the outcome of these last-minute talks,"
a person familiar with the negotiations said. "The government
cannot grant rates increase in an election year while Suez is
frustrated that no progress has been made after two years of
talks."

Argentina holds important congressional elections in October.
President Nestor Kirchner has publicly attacked Suez in the past
and is seen unwilling to appear soft in negotiations during such
a politically sensitive period.


ALPARGATAS: Fitch Reiterates Junk Status on 5 Bond Issues
---------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains its
'D(arg)' rating on the following corporate bonds issued by
Alpargatas S.A.I. y C.:

- ARS70M worth of "Obligaciones negociables convertibles" with
undisclosed maturity date;

- US$5.1M worth of "O.N. convertibles" with undisclosed
maturity date;

- ARS80M worth of "Obligaciones Negociables Subordinadas
Obligatoriamente Convertibles en Acciones Ordinarias" that
matured on July 30, 2003.

- US$40M worth of "Eurobonos a Mediano Plazo - Serie X" with
undisclosed maturity date;

- US$81.1M worth of "Obligaciones Negociables Serie A por
U$S1.1 millones y Serie B por U$S 80 millones" with undisclosed
maturity date; and

The rating was assigned based on the Company's financial
condition as of March 31, 2005. A 'D(arg)' rating is assigned to
issues with very low recovery potential.


BANCO HIPOTECARIO: Controller Delays Approval of BNL Acquisition
----------------------------------------------------------------
Banco Hipotecario is yet to secure approval from its controlling
shareholders to acquire the local assets of Italian bank Banca
Nazionale de Lavoro, according to Dow Jones Newswires.

Banco Hipotecario announced in February that it would be
acquiring 100% of BNL Inversiones Argentinas S.A. for US$207
million. In exchange, BNL will acquire 3.7% of Banco
Hipotecario's shares with a book value of US$25 million.

The Economy Ministry had required Banco Hipotecario to first
secure approval from its controlling shareholders for the
acquisition. On Friday, Banco Hipotecario said there is still no
agreement.

The government holds a 43.9% stake in the bank but also holds a
"golden share." This means the state can veto decisions made by
fellow shareholder IRSA (IRS), which runs the bank.

Banco Hipotecario may lose its chance to acquire BNL's local
assets as the Italian bank is reportedly looking for new buyers.

However, Banco Hipotecario claims negotiations with BNL continue
but said that previous conditions "could be affected by the
eventual change in those same conditions and in the assets to be
acquired."

CONTACT: Banco Hipotecario S.A.
         151 Reconquista
         Buenos Aires
         Argentina
         Phone: +54 11 4347 5546
         Web site: http://www.hipotecario.com.ar


BANCO HIPOTECARIO: Regulator Summons Execs. to Aug. 22 Hearing
--------------------------------------------------------------
Fifteen executives and senior managers of Banco Hipotecario SA
and five members of its audit board have been summoned to appear
before the Comision Nacional de Valores (National Securities
Commission) on Aug. 22 for an interrogation regarding
questionable payments, reports Dow Jones Newswires.

Among those summoned are President Clarisa Lifsic de Estol, Vice
President Eduardo Elsztain and Chief Financial Officer Gabriel
Saidon.

The market watchdog recently completed an investigation that
revealed payments totaling more than ARS30 million pesos
($1=ARS2.865) to senior management in 2005 were not properly
disclosed or subject to the right approval process in
shareholder meetings.

The investigation dealt with bonus payments under a special
system of compensation known as SAR, which tied payments to
appreciations in share value, as well as a profit-sharing
arrangement. Among other amounts, it referred to a total outlay
of ARS10.740 million this year to Elsztain and ARS3.159 million
to Lifsic de Estol.

The Commission found that the SAR payments could not be
considered "advances" in return for some other consideration by
the recipients at a later date and that for this and other
reasons they should have been directly put before the annual
general assembly of shareholders on May 31 this year. It also
found that the bank was effectively bankrupt as of December
2004.

The investigation also concluded that audit committee director
Jose Abelovich was ineffective in his duty to explain the
payments in question to the shareholder assembly.


CLUB TRAFICO'S: Individual Reports to be Submitted by Trustee
-------------------------------------------------------------
Mr. Federico D. Bonello, the trustee overseeing the
reorganization proceedings of Club Trafico's Old Boys, will
submit the individual reports on the validated creditors' claims
tomorrow, July 27, 2005. The court-appointed trustee stopped
accepting claims on May 31, 2005.

Mr. Bonello is also required by the court to submit a general
report essentially auditing the Company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. The report will be presented
in court on September 8.

An informative assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled on March 8 next year.

Club Trafico's Old Boys began reorganization following the
approval of its bankruptcy petition by Court No. 2 of
Pergamino`s civil and commercial tribunal.

Dr. Bernardo Louise, clerk of court, assists the court on this
case.

CONTACT: Club Trafico's Old Boys
         Calle Velez Sarsfield 368
         Pergamino

         Mr. Federico D. Bonello, Trustee
         Av. J. A. Roca 814
         Pergamino


CUEROS LITORAL: Gets Court Approval for Reorganization
------------------------------------------------------
Cueros Litoral S.A. will begin reorganization following the
approval of its petition by Court No. 9 of Corrientes's civil
and commercial tribunal. The opening of the reorganization will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Infobae reveals that Elena Alcira Rodriguez and Sergio Augusto
Monzon will oversee the reorganization proceedings as the court-
appointed trustee. They will verify creditors' claims until Aug.
4, 2005. The validated claims will be presented in court as
individual reports on Sep. 15, 2005.

The trustees are also required by the court to submit a general
report essentially auditing the Company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. The report will be presented
in court on Nov. 3, 2005.

An Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled on June 12, 2006.

CONTACT: Cueros Litoral S.A.
         Jose R. Vidal 3802
         Ciudad de Corrientes (Corrientes)

         Ms. Elena Alcira Rodriguez
         Mr. Sergio Augusto Monzon, Trustees
         J. R. Vidal 2130
         Ciudad de Corrientes (Corrientes)


EDEMSA: S&P Maintains Default Rating on Bonds
---------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains its default ratings on US$150 million bonds issued by
Empresa Distribuidora de Electricidad de Mendoza S.A. (EDEMSA)

The bond issue, which matured on April 13 this year, is
described as "Programa de emision de Obligaciones Negociables
simples." EDEMSA's financial standing as March 31, 2005 dictated
the rating action, says CNV.

A 'D' rating is assigned when the issuer has filed for
bankruptcy or when interest or principal payments are not made
on the due date, even if the applicable grace period has not
expired, unless S&P believes that such payments will be made
during such grace period.

Edemsa is the power distributor serving the province of Mendoza.
It has some 310,000 clients over its 110,000 sq. km. concession
area.

CONTACT: Empresa Distribuidora de Electricidad de Mendoza S.A.
         San Martin 322 (5500)
         Mendoza


EMDERSA: Ashmore Seeks to Take Controlling Stake
------------------------------------------------
Argentine power distribution companies Edesa, Edesal and Edelar,
with operations in the provinces of Salta, San Luis and La
Rioja, may change ownership again before the end of the year.

The three utilities, which are part of the Grupo Emdersa group,
are 90% controlled by funds HSBC Private Equity Latin American
and JP Morgan Partners, while the other 10% is in employee
hands.

Emdersa is carrying out a US$110 million debt-restructuring
program that started in March. Its main creditors are investment
groups Ashmore and Marathon, which bought debt at low price and
now hold over 50% of Emdersa's debt. Ashmore is seeking to
capitalize its holdings by exchanging debt for shares in the
three power utilities.

Early this year, HSBC and JP Morgan opened a data room in order
to find potential investors interested in taking control of
Emdersa. At the time, funds Dolphin, DyG and ARF were reported
to be analyzing the figures.

"As this operation was frustrated, Emdersa's owners started to
negotiate the restructuring of liabilities with creditors", said
a source familiar with the talks.

As a result of the negotiations, Ashmore started to control an
important part of the three distributors and is now seeking to
make money out of them. It has initiated talks with Latin
American Energy Fund and with a group of investors that
represents capitals from Spain and Italy, the source added.

But Emdersa sources denied that the Company is about to be sold.

"The only thing going on is a debt restructuring process that,
indeed, started four months ago. Creditors and shareholders are
involved in negotiations, but nothing has been closed," the
sources said.

If Ashmore finally assumes control of Emdersa, it would be the
fifth time the group changes hands in nine years.


ETINO: Verification Ends, Trustee to Submit Individual Reports
--------------------------------------------------------------
The verification of claims of creditors of Etino S.R.L. will
stop tomorrow, July 27, 2005. These claims will serve as basis
for the individual reports which Mr. Fernando Miguel Altare, the
trustee, will present to court for approval on Sep. 8, 2005.

As required by the Argentine bankruptcy law, Mr. Altare will
also prepare a general report, which is due on Oct. 20, 2005.

Etino S.R.L. was declared "Quiebra" by Court No. 14 of Buenos
Aires' civil and commercial tribunal. Clerk No. 28 assists the
court on this case that will end with the sale of the Company's
assets. Proceeds from the sale will be used to repay the
Company's debts.

CONTACT: Mr. Fernando Miguel Altare, Trustee
         Piedras 153
         Buenos Aires


FABRICA DE HELADOS: Deadline for General Report Approaches
----------------------------------------------------------
The deadline for the submission of the general report of the
Fabrica de Helados Nueva Santa Maria S.R.L. bankruptcy case will
be on Aug. 18, 2005. The general report summarizes events
relevant to the reorganization and provides an audit of the
Company's accounting and business records.

Infobae reports that Mr. Ricardo Manuel Menendez, the trustee
appointed by the court for the Company's case, submitted the
individual reports on June 23, 2005 after verifying creditors'
proofs of the Company's indebtedness on May 10, 2005.

Fabrica de Helados Nueva Santa Maria S.R.L. entered bankruptcy
protection after Court No. 5 of Santa Fe's civil and commercial
tribunal ordered the Company's liquidation.

CONTACT: Mr. Ricardo Manuel Menendez, Trustee
         Avda Pellegrini 1637
         Rosario (Santa Fe)

  
FARGO: Debt Restructuring Terms Are Harshest In History
-------------------------------------------------------
Argentine breadmaker Compania de Alimentos Fargo SA has the
harshest debt repayment terms in the history of the country's
corporate restructuring, with an estimated 87% net present value
"haircut" on its debt.

Citing a report released Friday by Argentine Research senior
analyst Roberto Drimer, Dow Jones Newswires reports that holders
of Fargo's US$134 million in subordinated debt will recover 13
cents on the dollar. The Company is offering to exchange the
US$134.9 million in old bonds for zero-coupon, peso-denominated
notes totaling ARS391.1 million. While there is no reduction in
principal, the new bonds mature in 2037 and have a grace period
of seven years, with principal payments beginning in 2012.

Fargo also has ARS96.5 million in privileged debt and the
largest holder of these obligations is Bismark Acquisition LLC,
an investment vehicle indirectly controlled by Mexican
businessman Fernando Chico Pardo. Bismark sold its 30% stake in
Fargo to Mexican baked-goods company Grupo Bimbo last year.

Bismark and other holders of privileged debt will be paid back
in annual installments over eight years, with a one-year grace
period, starting in December 2006.

"We understand that minority investors have two alternatives,
divest or wait for a significant improvement in the exchange
offer," Drimer said in its Friday note. "Given the imbalance in
power between guaranteed and subordinated (debt), we believe the
market offers today the best 'recovery' option."

The report said Fargo's 2008 bonds, which the company stopped
paying in 2002, are trading around $24, up from $10 in December
2002 but down from $30 in March 2005.

Earlier this year, when Fargo officials re-started talks with
the Company's main creditors with Bimbo's backing, expectations
began rising that the Mexican concern's deep pockets would
generate a better offer. This speculation "is vanishing,"
according to Drimer, and is also reflected in the decline in
Fargo's defaulted bonds.


GRANJA SAN PATRICIO: Court Grants Reorganization Plea
-----------------------------------------------------
Granja San Patricio S.A. successfully petitioned for
reorganization after Court No. 3 of Buenos Aires' civil and
commercial tribunal issued a resolution opening the Company's
insolvency proceedings, Infobae reports.

Under insolvency protection, the Company will continue to manage
its assets subject to certain conditions imposed by Argentine
law and the oversight of a court-appointed trustee.

The source relates that Roberto Di Martino will serve as trustee
during the course of the reorganization. The trustee will be
accepting creditors' proofs of claim for verification until Sep.
21, 2005.

After verifications, the trustee will prepare the individual
reports and submit it in court on Nov. 3, 2005. He will also
present a general report for court review on Dec. 19, 2005.

The Company will endorse the settlement proposal, drafted from
the submitted claims, for approval by the creditors during the
informative assembly scheduled on June 13, 2006.

Clerk No. 6 assists the court with the proceedings.

CONTACT: Mr. Roberto Di Martino, Trustee
         Avda Callao 449
         Buenos Aires
  

IMAGEN SATELITAL: Fitch Retains Default Ratings on ONs
------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains its
default rating on US$80 million worth of "obligaciones
negociables (ONs)" issued by Imagen Satelital S.A..

Local securities regulator, the CNV, reports that Fitch retained
a junk rating on the bonds based on the Company's financial
status as of March 31, 2005.

CONTACT: Imagen Satelital S.A.
         Av. del Libertador 602
         Buenos Aires
         Phone: (011) 4814-1190/1196


HOSPEDAR S.A.: Validation of Claims Ends
----------------------------------------
Court-appointed trustee Jessica Minc will stop validating
creditors' proofs of indebtedness of Hospedar S.A. tomorrow,
July 27, 2005. Creditors who failed to submit the required
documents will not qualify for any post-liquidation
distributions.

Court No. 23 of Buenos Aires' civil and commercial tribunal
declared local Company Hospedar S.A. "Quiebra", in favor of
Cooperativa de Credito, Vivienda y Consumo Creditos Inmobiliaria
Ltda., whom the Company has debts amounting to US$16,830.41.

Clerk No. 46 assists the court on the case.

CONTACT: Hospedar S.A.
         San Martin 390
         Buenos Aires

         Ms. Jessica Minc, Trustee
         Vuelta de Obligado 1715
         Buenos Aires


JUAN SANTORO: Court Appoints Trustee for Reorganization
-------------------------------------------------------
Juan Santoro S.A., a company operating in Bella Vista, is ready
to start its reorganization after the city's civil and
commercial court appointed Federico Ruben Diarte to supervise
the proceedings as trustee.

An Infobae report states that Mr. Diarte will verify creditors
claims until Aug. 23, 2005. Afterwards, he will present these
claims as individual reports for final review by the court on
June 11, 2005. Mr. Diarte will also provide the court with a
general report pertaining to the Company's reorganization on
Oct. 11, 2005. The court has scheduled the informative assembly
on Nov. 7, 2005.

CONTACT: Juan Santoro S.A.
         La Rioja 1371
         Bella Vista (Corrientes)

         Mr. Federico Ruben Diarte, Trustee
         Corrientes 560
         Bella Vista (Corrientes)


LO DE JORGE: Trustee to Present Individual Reports to Court
-----------------------------------------------------------
The individual reports for the Lo De Jorge S.R.L. reorganization
will be submitted on Sep. 7, 2005. These reports contain the
results of the verification of the claims submitted by the
Company's creditors. The verification phase ended on July 8,
2005.

Infobae relates that Mr. Victor Joaquin Gonzalez, the trustee
appointed by Paso de los Libres' civil and commercial Court No.
4, is also obligated to give the court a general report of the
case on Oct. 24, 2005. The general report summarizes events
relevant to the reorganization and provides an audit of the
Company's accounting and business records.

Mr. Gonzalez will present the completed settlement proposal to
its creditors during the informative assembly scheduled on April
24, 2006.

Clerk No. 2 assists the court on this case.

CONTACT: Lo De Jorge S.R.L.
         Pago Largo 1149
         Paso de los Libres (Corrientes)

         Victor Joaquin Gonzalez
         San Martin 988
         Paso de los Libres (Corrientes)


ORGANIZACION ARGENTINA: General Report Due on September
-------------------------------------------------------
Court-appointed trustee Carlos Gregorio Dominguez will present
to court on Sep. 12, 2005 the required audit of the accounting
and business records of Organizacion Argentina de Sepelios
S.R.L. through a general report, Infobae reveals.

Mr. Dominguez submitted on Monday, July 25, 2005, the individual
reports on the validated proofs of the Company's indebredness,
which creditors submitted before May 27, 2005.  

An informative assembly, where the completed settlement proposal
is presented to the Company's creditors, is scheduled on March
15, 2006.

Organizacion Argentina de Sepelios S.R.L., a company operating
in Cordoba, began the reorganization proceedings after the
city's civil and commercial Court No. 3 granted its petition for
"concurso preventivo".

CONTACT: Mr. Carlos Gregorio Dominguez, Trustee
         Rio Negro 480
         Cordoba



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B R A Z I L
===========

NET SERVICOS: Funds Acquire 115,336,300 Preferred Shares
--------------------------------------------------------
Net Servicos de Comunicacao S.A. (Company or NET) announced,
according to information received on July 20, 2005 from Banco
Opportunity S.A., as the manager of Opportunity Logica II FIA,
Opportunity Logica II Institucional FIA, OPP I FIA, Opportunity
I FIA, Opportunity Mercado a Vista FIA, Opportunity Midi FI
Multimercado, Opportunity Special FIA and Luxor FI Multimercado
investment funds (Funds), the following notice to the market:

Under the terms of article 12, main section, of instruction #
358 issued by CVM - Brazilian Securities Commission as of
1.3.2002, the funds have acquired together, on July 19, 2005, a
total of 115,336,300 preferred shares issued by the Company,
corresponding to 5.06% of the total preferred shares
outstanding.

The fund manager announced that such acquisition is part of its
investment strategy, not having the intent to change the
Company's current ownership structure.

CONTACT:  NET SERVICOS DE COMUNICACAO
          Investor Relations: Marcio Minoru
          Phone: 011-5511-2111-2811
          Email: minoru@netservicos.com.br

          Sandro Pina
          Phone: 011-5511-2111-2721
          Email: sandro.pina@netservicos.com.br
          http://www.netservicos.com.br

  
UNIBANCO: Ups Tier 1 Perpetual Bond Issue on Strong Demand
----------------------------------------------------------
Unibanco SA (UBB), the country's third largest private bank,
increased to US$500 million from US$250 million a Tier 1
perpetual bond issue due to strong demand.

The bonds are non-callable for five years from the date of issue
and were sold at an annual coupon rate of 8.7%. International
banks Merrill Lynch (NYSE: MER) and UBS (NYSE: UBS) coordinate
the issue.

Unibanco saw its first quarter net profit jump 45.3% compared to
1Q04 to BRL401 million (US$162 million) on strong lending.
Unibanco is controlled by Unibanco Holdings.

CONTACT: Unibanco - Uniao de Bancos Brasileiros S.A.
         Investor Relations Area
         Phone: (55 11) 3097-1980
         Fax: (55 11) 3813-6182
         E-mail: investor.relations@unibanco.com
         URL: www.ir.unibanco.com



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C H I L E
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SR TELECOM: Launches 8.15% Debentures Exchange Offer
----------------------------------------------------
SR Telecom Inc. (TSX: SRX - News; Nasdaq: SRXA - News) launched
Thursday its previously announced offer to exchange its
outstanding CDN$71 million 8.15% debentures due August 31, 2005
and all accrued interest of approximately CDN$3.5 million
thereon into new 10% Convertible Redeemable Secured Debentures
due October 15, 2011. The exchange offer is subject to terms and
conditions set forth in a private offering memorandum and
consent solicitation statement sent to holders of 8.15%
debentures. The Corporation has entered into lock-up agreements
with holders of approximately CDN$67 million in principal amount
or 95% of the outstanding 8.15% Debentures. The exchange offer
will expire on August 18, 2005 (unless extended).

About SR Telecom

SR TELECOM (TSX: SRX, Nasdaq: SRXA) designs, manufactures and
deploys versatile, Broadband Fixed Wireless Access solutions.
For over two decades, carriers have used SR Telecom's products
to provide field-proven data and carrier-class voice services to
end-users in both urban and remote areas around the globe. SR
Telecom's products have helped to connect millions of people
throughout the world.

A pioneer in the industry, SR Telecom works closely with
carriers to ensure that its broadband wireless access solutions
directly respond to evolving customer needs. Its turnkey
solutions include equipment, network planning, project
management, installation and maintenance.

SR Telecom is a principal member of WiMAX Forum, a cooperative
industry initiative which promotes the deployment of broadband
wireless access networks by using a global standard and
certifying interoperability of products and technologies.



=============
J A M A I C A
=============

DIGICEL LIMITED: Sells $300M, 7-Yr Senior Notes
-----------------------------------------------
Caribbean mobile operator Digicel Limited sold US$300 million of
seven-year senior notes in the 144a private placement market.
The size of the deal was increased from an originally planned
US$250 million. Citigroup Global Markets Inc. and J.P. Morgan
were the joint lead managers for the sale. The bond was priced
at a coupon of 9.25%. Proceeds of the transaction will be used
to finance expansion and consolidation of recently acquired
assets.



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M E X I C O
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BALLY TOTAL: Largest Shareholder Wants CEO Replaced
---------------------------------------------------
Liberation Investments sent a letter to the Independent
Directors of Bally Total Fitnes Holding Corp. (NYSE: BFT),
stating that Liberation continues to believe that the board
should replace the existing CEO. In the letter, Liberation
Investments President Gregg Frankel wrote:

We were astounded by your response to our letter dated July 18,
2005. While we can agree to disagree as to whether or not the
CEO should be replaced at this time, we were shocked by the
unprofessional tone your letter assumed by launching a personal
attack on a representative of one of the Company's largest
shareholders. Our sole purpose in writing our letter was to
express our views on how the Company can best maximize the value
of Bally Total Fitness for all shareholders.

Indeed one of your independent directors, Marilyn Seymann, in
her book, The Governance Game, encourages investors to make
their opinions known to boards and not to be apathetic. "If
governance is ever going to have any meaning, the owners of the
company will have to act like owners."

She even suggests that investors who fail to make their opinions
known to boards are asking for trouble. She does not qualify
that such opinions must concur with those of the current
management and board of the company. Further, we found it quite
surprising that another independent director, John Rogers, who
runs Ariel Capital Management, a large institutional investment
management company, would find a large investor speaking his
mind to the board reason to stoop to a personal attack.

The final paragraph of your letter was laced with innuendo and
factual misstatements. Mr. Pearlman served only as an outside
advisor to the Company on a limited number of specific
transactions, not as the chief executive. To attribute the
decline in Bally stock to him is ludicrous. In addition, the
acquisitions to which you allude were considered good deals at
the time, were fully vetted by management and each transaction
was approved by the Board. Some of you personally approved those
deals. The key to any transaction's success is the subsequent
execution, which was not under Mr. Pearlman's purview at any
time. I wonder if the independent board members are aware of the
fact that Paul Toback, on behalf of the Company, personally
retained Mr. Pearlman during the first six months of 2003. The
Company's compensation committee at the time, three members of
which continue to serve on the Company's board today, approved
his retention by Mr. Toback. We have found that in professional
business dealings it is better to deal in fact rather than
innuendo.

Liberation continues to believe that the capital markets have
lost confidence in the current CEO, and we do not find this
surprising in light of the fact that for two of the years for
which you are restating financials Mr. Toback served as the CEO
of the Company and personally signed and certified those
financial statements under Sarbanes-Oxley.

Please know that we remain committed to expressing our views and
pressing the Company to make any and all changes necessary to
maximize shareholder value. We are mindful that the Company is
in the midst of a new turnaround plan. Yet, Liberation continues
to believe that the board should begin a search to replace the
existing CEO. We also do not understand your unwillingness to
accept your largest single shareholder's proposal to have its
representative join the board to assist the Company in its
efforts to maximize shareholder value. We respectfully request
the opportunity to present our case to the independent board so
that you may fully understand our reasoning and hope we can move
forward in a more productive, professional manner.

CONTACT: Bally Total Fitness
         Matt Messinger
         Phone: (773) 864-6850
         E-mail: mmessinger@ballyfitness.com

         URL: http://www.ballyfitness.com

         Brunswick Group       
         Frank De Maria
         Phone: (212) 333-3810
         E-mail: fdemaria@brunswickgroup.com

         Liberation Investment Group LLC
         Emanuel R. Pearlman
         Phone: 310-479-3434


EMPRESAS ICA: S&P Places 'B-' Rating On CreditWatch Positive
------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' corporate
credit rating on Empresas ICA S.A. de C.V. (ICA) on CreditWatch
with positive implications.

"The rating action reflects the recent approval by ICA's
shareholders of a $230 million capital increase," said Standard
& Poor's credit analyst Jose Coballasi. "The CreditWatch listing
will be resolved upon the completion of a review of ICA's
operating and financial prospects. Improvements in liquidity,
additions to backlog, and recent financial performance are among
the positive factors to be considered by Standard & Poor's in
its upcoming review."

Primary Credit Analyst: Jose Coballasi, Mexico City
(52)55-5081-4414; jose_coballasi@standardandpoors.com  

Secondary Credit Analyst: Raul Marquez, Mexico City
(52) 55-5081-4437; raul_marquez@standardandpoors.com  


GRUPO IUSACELL: Sees 26.2% Increase in Net Revenues in 2Q05
-----------------------------------------------------------
Grupo Iusacell, S.A. de C.V. (NYSE: CEL) (BMV: CEL) (Iusacell or
the Company) reported Friday its unaudited results for the
second quarter 2005(1), which recorded a 26.2% increase in net
revenues, from Ps. 1,128 million in the second quarter of 2004
to Ps. 1,423 million in the second quarter of 2005.

For the first six months, Iusacell recorded a 24.0% increase
from Ps. 2,221 million in the first half of 2004 to Ps. 2,753
million in the first half of 2005.

Operating income before depreciation and amortization increased
50.2% to Ps. 300 million in the second quarter of 2005, in
comparison with the Ps. 200 million recorded in the same period
the year before. For the first six months, Iusacell recorded a
67.7% increase in operating income before depreciation and
amortization from Ps. 338 million in the first half 2004 to Ps.
567 million in the first half of 2005.

Highlights:

Millions of Pesos (2), except percentages

              2Q 2004 2Q 2005 Change % 6M 2004 6M 2005 Change %

Net Revenue     1,128   1,423    26.2%   2,221   2,753    24.0%
Total Cost        639     743    16.3%   1,348   1,401     4.0%
Operating
Expenses          289     380    31.3%     535     786    46.8%
Operating Income
before Depreciation
and Amortization  200     300    50.2%     338     567    67.7%
Net Loss         (984)   (34)   -96.6%  (1,344)   (398)  -70.4%

(1) Unless otherwise noted, all monetary figures are expressed
in Mexican pesos as of June 30, 2005 in accordance to Mexican
GAAP. The symbols "Ps" and "US$" refer to Mexican pesos and U.S.
dollars, respectively.

(2) Constant June 30, 2005 pesos.

Revenues: Revenues increased 26.2% to Ps. 1,423 million in the
second quarter of 2005, from Ps. 1,128 million in the same
period of 2004, driven mainly by an increase in service revenue
as a result of a larger subscriber base, higher consumption per
user and revenues derived from exchange of capacity services
provided to Unefon. The Grupo Iusacell subscriber base at the
end of the second quarter of 2005 was 1.62 million.

Costs and Operating Expenses: Total cost and operating expenses
increased by 16.3% and 31.3% to Ps.743 million and Ps.380
million, respectively, compared to Ps. 639 million and Ps. 289
million for the same quarter last year. The increase in total
cost is mainly due to higher interconnection cost and technical
expenses, offset by a reduction in handset subsidies. The
increase in operating expenses is primarily due to advertising
costs related to the launching of new products and special
promotions and the increase in personnel expenses and salaries
due to the establishment of regional sales and customer service
structures in line with our strategy of providing the best
service to our clients.

Operating income before depreciation and amortization: Iusacell
recorded an operating income before depreciation and
amortization in the second quarter of 2005 of Ps. 300 million,
representing a 50.2% increase compared to the Ps. 200 million
recorded in the second quarter of 2004. This increase was
primarily the result of the increase in revenues described
above.

Net Loss: The net loss of Ps. 34 million recorded in the second
quarter of 2005 represented a 96.6% decrease compared to the net
loss of Ps. 984 million recorded in the same period the year
before. This decrease was primarily due to a lower depreciation
and amortization and a foreign exchange gain of Ps. 414 million.

CAPEX: Investments during the quarter were in order of US$16
million, directed mainly toward expanding the coverage and
capacity of Grupo Iusacell's 3-G network and EV-DO (Evolution
Data Only) services.

Recent Events

Extraordinary meeting of Shareholders

The Extraordinary Shareholders' Meeting held on June 1, 2005
approved, by the vote of 96.70% of the Company's shares, the
termination of the American Depositary Receipts (ADRs) program
that the Company has in the United States, which ADRs are listed
in the New York Stock Exchange (NYSE).

Trading of Iusacell ADRs on the NYSE to be suspended on or about
September 19, 2005

The New York Stock Exchange is expected to suspend trading of
the ADRs on or about September 19, 2005, which is the date when
the ADR program will be terminated. ADR holders then will have
60 days to exchange their ADRs for shares that are traded on the
BMV. Upon the expiration of the 60-day period, The Bank of New
York, which is acting as ADR depositary bank, will have the
right to sell the shares underlying the ADRs that were not
surrendered and distribute the proceeds of the sale to holders.

Debt restructuring

The Company continues negotiations with several of its
creditors, seeking to obtain a comprehensive restructuring
agreement as soon as possible.

Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE and BMV: CEL) is a
wireless cellular and PCS service provider in Mexico with a
national footprint. Independent of the negotiations towards the
restructuring of its debt, Iusacell reinforces its commitment
with customers, employees and suppliers and guarantees the
highest quality standards in its daily operations offering more
and better voice communication and data services through state-
of-the-art technology, such as its new 3G network, throughout
all of the regions in which it operates.

To see financial statements:
http://bankrupt.com/misc/GRUPO_USACELL.htm

CONTACT: Grupo Iusacell, S.A. de C.V.     
         Jose Luis Riera K.
         Chief Financial Officer
         Phone: 011-55-5109-5927
                    or
         J. Victor Ferrer
         V., Finance Manager
         Phone: 011-55-5109-5273
         E-mail: vferrer@iusacell.com.mx
         URL: http://www.iusacell.com



=================
V E N E Z U E L A
=================

PDVSA: Former Exec Refutes Output Claims
----------------------------------------
Former Petroleos de Venezuela (PDVSA) President, Luis Giusti,
stated Friday that the state oil company is producing way below
its stated figures, Business New Americas reports.

To support his claims, Mr. Giusti cited the government's plan to
use US$6 billion from the nation's reserves to fund certain
social programs.

"Venezuela nowadays is producing 600,000 barrels [a day] below
OPEC's quota. If you take into account current oil prices, you
will conclude that Venezuela would have on average US$10bn a
year if it could complete its quota. That's an even bigger
amount than what's being withdrawn from the central bank,"
Giusti said.

The latest increase in production quotas for OPEC member
countries set a level of 3.2Mb/d for Venezuela. Even current
PDVSA management admits the Company is not meeting the quota by
100,000b/d.

A PDVSA spokesperson dismissed Mr. Giusti's remarks, saying:
"Clearly Mr. Giusti has been outside the company too long and he
no longer has all the information."

Mr. Giusti was PDVSA president from 1994-March 1999. He left the
Company shortly after President Hugo Chavez took power.

CONTACT: Petroleos de Venezuela S.A.
         Edificio Petroleos de Venezuela
         Avenida Libertador, La Campina, Apartado 169
         Caracas, 1010-A, Venezuela
         Phone: +58-212-708-4111
         Fax: +58-212-708-4661
         Web site: http://www.pdvsa.com.ve




                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

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